Q.

Which among (he following is not the outcome of decrease in prime lending rate?

A. to raise the bank loan
B. decline in saving rate
C. decline in productivity
D. increased demand of consumer products
Answer» C. decline in productivity
Explanation: Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility. When these rates are high, demand decreases and output falls to meet the new lower demand. Less output requires fewer worker, driving unemployment higher.
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